On July 1, 2016, Jelly signed an agreement to operate as a franchisee of Fishers Printers for an initial franchise fee of P12,000,000. On the same date, Jelly agreed to pay it in four equal annual payments of P3,000,000 beginning July 1, 2016. Any payment is not refundable and no future services are required of the franchisor. Jelly can borrow at 12% for a loan of this type. Jelly should record the acquisition cost of the franchise on July 1, 2016 at